Preying On Owners' Adversity

Hunter-Jones, 47, daughter of a minister and mother of seven children, is a deeply religious woman who wants to believe the best of everyone. But as she tearfully recounted the elaborate manuevers by which a short-lived financial company obtained a deed to her South Side home of 20 years, her forgiving nature was tested.

"To me, that house is like a part of me, and for the last few years, it's been strange," she said. "I never knew when somebody was going to knock at the door and say I've got to move."

She is still living in her house and fighting in court to keep it, so it hasn't literally been stolen--only on paper. But she has been threatened with eviction and spent many a sleepless night.

Hunter-Jones is one of a number of Chicagoans who allegedly have been victimized over the past several years by a now-defunct company called B.B.C. Investments Inc. The initials of the company, which was incorporated in 1991 and dissolved in 1994, stand for Building Better Communities.

Kenneth Steward, the former president of the company, which was in business from January of 1990 to mid-1994, says that it was a legitimate business set up to help people in financial straits.

"The whole intent, from the beginning, was to help people out of foreclosure," said Steward, who is now working in property management. He acknowledged the company might have been mismanaged, but denied there was intentional wrongdoing.

"There's never been anyone to either charge me or find me guilty of doing anything criminal or otherwise. There's been a lot of allegations, but that's all there's ever been."

Suits filed in a Cook County court, however, allege B.B.C. preyed on homeowners who fell behind on their mortgage payments, promising money to help them avert foreclosure and then, through trickery or fraud, getting a deed to their homes.

Once B.B.C. representatives got the deed, they allegedly used it to refinance the property with a mortgage for a much larger amount than the original loan, the suits say.

In one suit settled last year, a judge ruled that the deed used to obtain the refinanced mortgage was forged.

In that suit, which names Steward, among others, as defendants, it was alleged that representatives of B.B.C. used the forged deed to obtain a $50,250 mortgage on the home of a Southeast Side couple who were having trouble paying off their $18,000 mortgage. Steward denied knowledge of forged deeds in any of B.B.C.'s deals.

The suit filed by Hunter-Jones against several people involved in B.B.C., including Steward, alleges the group used a forged deed to her two-bedroom brick home, on which she had an outstanding mortgage balance of less than $10,000, to get a refinanced mortgage of $37,100.

The B.B.C. activities described in the suit follow a pattern similar to a classic real estate scam called equity-skimming, which victimizes financially troubled owners who panic over the prospect of losing their homes. The object of the scheme, which has been seen all over the country, is to wring the last few dollars out of distressed property and property owners.

"It's happened in just about every part of the country--Boston, Camden, N.J., Atlanta, the West Coast," said Robert O'Toole, senior vice president of residential finance of the Washington-based Mortgage Bankers Association of America. "It pops up every couple of years."

In some cases, the operators of the scheme simply get the homeowners to pay them rent while they are supposedly paying off the delinquent mortgage. But the mortgage ends up unpaid, and foreclosure ensues.

The equity-skimming alleged in the Chicago cases is more elaborate, requiring all the usual paperwork and underwriting that goes with getting a mortgage.

"It's harder to do because a new lender would scrutinize the new borrower," said O'Toole.

Apparently that didn't stop the B.B.C. group. In addition to the alleged schemes victimizing Hunter-Jones and the Southeast Side couple, B.B.C. is named in at least two other similar complaints brought to groups helping the poor with legal problems.

The Southeast Side couple, who wished not to be identified, got Cook County court judgments last year divesting B.B.C. and its representatives of any interest in their property and voiding the refinanced mortgage, which was held by Fleet Finance, one of the nation's biggest mortgage lenders. Their nightmare is over and they own their home free and clear.

Hunter-Jones is still fighting, with the help of the Chicago Volunteer Legal Services Foundation. Her volunteer attorney, John Ropiequet of Arnstein & Lehr, said he hopes to reach a settlement soon with Fleet, which also holds the allegedly fraudulent refinanced mortgage on Hunter-Jones' home.